Question
In: Finance
Replacement Analysis St. Johns River Shipyard's welding machine is 15 years old, fully depreciated, and has...
Replacement Analysis
St. Johns River Shipyard's welding machine is 15 years old,
fully depreciated, and has no salvage value. However, even though
it is old, it is still functional as originally designed and can be
used for quite a while longer. The new welder will cost $82,000 and
have an estimated life of 8 years with no salvage value. The new
welder will be much more efficient, however, and this enhanced
efficiency will increase earnings before depreciation from $29,000
to $58,000 per year. The new machine will be depreciated over its
5-year MACRS recovery period, so the applicable depreciation rates
are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. The
applicable corporate tax rate is 40%, and the firm's WACC is 11%.
Should the old welder be replaced by the new one? What is the NPV
of the project? Round your answer to the nearest cent.
$
Solutions
Expert Solution
SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE
jeff jeffy answered 1 year agoRelated Solutions
Replacement Analysis St. Johns River Shipyard's welding machine is 15 years old, fully depreciated, and has...
Replacement Analysis St. Johns River Shipyard's welding machine
is 15 years old, fully depreciated, and has no salvage value.
However, even though it is old, it is still functional as
originally designed and can be used for quite a while longer. The
new welder will cost $84,500 and have an estimated life of 8 years
with no salvage value. The new welder will be much more efficient,
however, and this enhanced efficiency will increase earnings before
depreciation from $29,000 to...
St. Johns River Shipyard's welding machine is 15 years old, fully depreciated, obsolete, and has no...
St. Johns River Shipyard's welding machine is 15 years old,
fully depreciated, obsolete, and has no salvage value. However,
even though it is obsolete, it is perfectly functional as
originally designed and can be used for quite a while longer. A new
welder will cost $182,500 and have an estimated life of 8 years
with no salvage value. The new welder will be much more efficient,
however, and this enhanced efficiency will increase earnings before
depreciation from $27,000 to $74,000...
St. Johns River Shipyard's welding machine is 15 years old, fully depreciated, and has no salvage...
St. Johns River Shipyard's welding machine is 15 years old,
fully depreciated, and has no salvage value. However, even though
it is old, it is still functional as originally designed and can be
used for quite a while longer. The new welder will cost $81,500 and
have an estimated life of 8 years with no salvage value. The new
welder will be much more efficient, however, and this enhanced
efficiency will increase earnings before depreciation from $26,000
to $52,000 per...
St. Johns River Shipyard's welding machine is 15 years old, fully depreciated, and has no salvage...
St. Johns River Shipyard's welding machine is 15 years old,
fully depreciated, and has no salvage value. However, even though
it is old, it is still functional as originally designed and can be
used for quite a while longer. The new welder will cost $83,500 and
have an estimated life of 8 years with no salvage value. The new
welder will be much more efficient, however, and this enhanced
efficiency will increase earnings before depreciation from $29,000
to $58,000 per...
St. Johns River Shipyard's welding machine is 15 years old, fully depreciated, and has no salvage...
St. Johns River Shipyard's welding machine is 15 years old,
fully depreciated, and has no salvage value. However, even though
it is old, it is still functional as originally designed and can be
used for quite a while longer. A new welder will cost $182,500 and
have an estimated life of 8 years with no salvage value. The new
welder will be much more efficient, however, and this enhanced
efficiency will increase earnings before depreciation from $27,000
to $74,000 per...
Replacement Analysis St. Johns River Shipyards' welding machine is 15 years old, fully depreciated, and has...
Replacement Analysis
St. Johns River Shipyards' welding machine is 15 years old,
fully depreciated, and has no salvage value. However, even though
it is old, it is still functional as originally designed and can be
used for quite a while longer. The new welder will cost $81,500 and
have an estimated life of 8 years with no salvage value. The new
welder will be much more efficient, however, and this enhanced
efficiency will increase earnings before depreciation from $26,000
to...
Replacement Analysis St. Johns River Shipyards' welding machine is 15 years old, fully depreciated, and has...
Replacement Analysis
St. Johns River Shipyards' welding machine is 15 years old,
fully depreciated, and has no salvage value. However, even though
it is old, it is still functional as originally designed and can be
used for quite a while longer. The new welder will cost $184,000
and have an estimated life of 8 years with no salvage value. The
new welder will be much more efficient, however, and this enhanced
efficiency will increase earnings before depreciation from $25,000
to...
Replacement Analysis St. Johns River Shipyards' welding machine is 15 years old, fully depreciated, and has...
Replacement Analysis
St. Johns River Shipyards' welding machine is 15 years old,
fully depreciated, and has no salvage value. However, even though
it is old, it is still functional as originally designed and can be
used for quite a while longer. The new welder will cost $80,500 and
have an estimated life of 8 years with no salvage value. The new
welder will be much more efficient, however, and this enhanced
efficiency will increase earnings before depreciation from $28,000
to...
Replacement Analysis St. Johns River Shipyards' welding machine is 15 years old, fully depreciated, and has...
Replacement Analysis
St. Johns River Shipyards' welding machine is 15 years old,
fully depreciated, and has no salvage value. However, even though
it is old, it is still functional as originally designed and can be
used for quite a while longer. The new welder will cost $84,500 and
have an estimated life of 8 years with no salvage value. The new
welder will be much more efficient, however, and this enhanced
efficiency will increase earnings before depreciation from $25,000
to...
Replacement Analysis St. Johns River Shipyards' welding machine is 15 years old, fully depreciated, and has...
Replacement Analysis
St. Johns River Shipyards' welding machine is 15 years old,
fully depreciated, and has no salvage value. However, even though
it is old, it is still functional as originally designed and can be
used for quite a while longer. The new welder will cost $180,500
and have an estimated life of 8 years with no salvage value. The
new welder will be much more efficient, however, and this enhanced
efficiency will increase earnings before depreciation from $28,000
to...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- D. Explain what it means for recommendations to be specific and actionable. E. Discuss how charts...
- Capital Toys’ management is considering eliminating product A, which has been showing a loss for several...
- Computer Networks IT 210 Please Use your own words . sorry No handwriting no copy paste...
- The Coronavirus will obviously impact the economy of big organizations like FIFA or the NBA but...
- Question: what is the difference between rights of assertion and observation assertion. Include which financial statements...
- how to read a csv file in php and make a html table? I can't use...
- ABC Inc. is evaluating a project that will increase annual sales by $230,000 and annual cash...
ADVERTISEMENT